Survey: Majority of Michigan business leaders expect economic decline

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Although more optimistic about their own businesses, the majority of Michigan business leaders expect an economic slowdown soon. // Image bank

While top state leaders are optimistic about their businesses in Michigan even as the state and country face economic headwinds and labor shortages remain significant, 53% s expect an economic decline next year, according to a quarterly economic survey released today by business leaders for Michigan.

About 60% of respondents expect their companies to keep their capital investments at the same level in Michigan, while 26% expect them to increase their capital investments.

On the job front, 70% of executives expect their employment level to stay the same, while 20% expect an increase. And while the future of work may look different with many companies pursuing a hybrid office/work from home model, 74% expect to retain their current real estate footprint.

Eighty-four percent of Michigan business leaders surveyed expressed concern about the ability to fill jobs due to labor shortages. While all jobs are in demand, most companies need office workers and skilled workers, and 67% of business leaders cite applicants who lack the necessary skills as their top challenge.

“Michigan businesses work every day to maintain and grow jobs in our state, even with inflation and labor shortages. Ensuring they can continue to do so in the future will require smart policies and investments from our state,” said Jeff Donofrio, president and CEO of Business Leaders for Michigan. “With a softening economic outlook, more than ever, Michigan will need to find ways to hone its workforce and become more competitive for business and job creation.”

Michigan business leaders also shared their current workplace policy in the recent survey, with most companies having office work requirements. More than half of respondents’ companies have a structured hybrid office environment and about a third use a hybrid employee choice model.

Q3 survey results in numbers:

  • 70% of executives expect their company’s employment in Michigan to remain unchanged, 20% plan to increase it and 10% plan to reduce it
  • 60% plan to keep their capital investment in Michigan about the same, 26% plan to increase it, and 14% plan to reduce it
  • 74% plan to keep their real estate footprint about the same, 16% plan to increase it and 10% plan to reduce it
  • 84% of Michigan business leaders struggle to fill positions and 67% say applicants lack the necessary skills
  • 87% of member companies are in a hybrid environment, with 55% having designated days for employees to be on duty
  • 46% expect the state’s economy to stay the same or improve over the next six to 12 months, 53% expect it to decline
  • 36% expect the US economy to stay the same or improve, while 64% expect it to decline
  • 52% of respondents expect inflation to fall next year, around 28% expect inflation to continue at the current rate and 20% expect it to rise

Michigan business leaders recently released “Compete to Win: Michigan’s Path to Top 10,” a plan that sets out a strategy for Michigan to become a leading state in economic growth.

The Michigan Business Leaders Benchmarking Study released in January informed “Compete to Win”, which placed Michigan at 29e in the country for economic competitiveness. “Compete to Win” outlines key recommendations for becoming a top 10 state through better educational outcomes, investing in people, accelerating the economy, and getting the fundamentals right.

Michigan Business Leaders conducted the internal member survey from July 25 to August 25. 12, 2022.

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